An Analysis Of The Interrelationship Between The Development Of Financial Intermediation And Economic Growth

In the modern economic activities, financial intermediation plays an increasingly important role, and financial innovation provides a new financial products and financial services for the financial intermediary organizations. Financial innovation improves the operational efficiency of financial intermediation and capital allocation efficiency through the promotion of financial intermediation development, then acceleration of capital formation and accumulation of capital, thereby promoting economic growth. This article is primarily from the perspective of financial innovation in financial intermediation, to study the development and economic growth of relevance. The full - text is divided into five major sections.Pre-words, the first part of this article briefly described the intent of scienticfic, research themes and research methods. This article is based on the problems in the development of financial intermediation, to discuss the relevance between financial intermediation development and economic growth. From analysis the origin of financial development theory, then gradually clear current study situation, combined with theoretical and empirical study method to analysis the financial intermediation development and economic growth of the reciprocity mechanism through the perspective of financial innovation.The first part related state's competitiveness. This section describes the related literature review of financial development. I introduced the Financial Deepening in Economic Development of Gurley and Shaw, the financial supply and demand theory of the Patrick, and the financial structure theory of Goldsmith. Secondly, mainly described the Schumpeter's innovation theory, technological innovation theory and institutional innovation theory. The financial innovation focused on five theories. At last, described three of economic growth - related theories. Through analyzing the the research results, it is helpful to study the financial intermediation development and economic growth of correlativity in the perspective of financial innovation. The second part is introduced the mechanism of the development of financial intermediary and financial innovation. Financial innovation is the development of inner motivation and a powerful impetus on the development of financial intermediation through reassembling financial factors, to effect on the face of the financial system and the future development of far-reaching financial intermediation,. Therefore, first of all, in this section introduced more comprehensive financial innovation connotation, and different scholars definition on financial intermediation and economic growth. Secondly, I studyed the six basic features of financial intermediation, financial innovation through these six functions of the operational efficiency and improve the funding allocation efficiency, increase capital accumulation, and promoting technical progress, thereby promoting economic growth. Third, from the two paths detailed analysis of financial innovation, financial intermediation development is how to promote economic growth. Finally, I studied the path of economic growth in financial intermediation of financial innovation and development.The third part is the empirical study on between the financial intermediation development and economic growth. I selected the data from the year of 1978 to 2007 for a sample application Granger causality. This article found that China's financial intermediation could improve the economic growth, but economic growth on the development of financial intermediation role is not significant, as well as financial innovation by increasing operational efficiency of financial intermediation and allocative efficiency. Therefore, financial reform in China should be placed on promoting financial intermediation, encourage the development of funds to a higher efficiency of enterprise mobility.The fourth part is the policy proposals on promoting economic growth. In the background of global financial crisis, to achieve sustained economic growth and stability, the government should change the current pattern of economic growth. China is necessary to strengthen economic reform efforts.The fifth part is the conclusion. Through the theoretical and empirical research, that in order to further our economic growth ,the government should chang the way of achieving economic growth targets, it is crucial to build a highly efficient financial intermediation system.This article had studied the relevence of the financial intermediation development and economic growth, and provided some policy proposals combined with our financial innovation, financial intermediation development and economic growth. However, countries with regard to this field is also gradually and perfected, I believe that financial crisis broke out will enable more scholars concerned about this field, continue to develop an in-depth study on financial intermediation and the relationship between economic growth.